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Urgent D Question 6 5 pts According to the Fisher effects, if the expected inflation rate is 1.2 percent per year and the real risk-

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D Question 6 5 pts According to the Fisher effects, if the expected inflation rate is 1.2 percent per year and the real risk- free rate is 5 percent per year, then the closest nominal risk-free rate is: O 3.8 percent O 2.4 percent O 4.2 percent . 6.2 percent Question 7 5 pts Classify each of the following in terms of their effect on interest rates (increase or decrease): 1. Covenants on borrowing (nonprice conditions) become more restrictive. 11. Total household wealth increases. l increases: Il decreases o I decreases; Il decreases O I increases: ll increases I decreases: ll increases

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